Question 1 - John, a calendar-year taxpayer subject to a 34 percent marginal tax rate, claimed a charitable-contribution deduction of $15,000 for a sculpture that the IRS later valued at $10,000. Compute the applicable overvaluation penalty.
Question 2 - Beth, a calendar-year taxpayer subject to a 34 percent marginal tax rate, claimed a charitable-contribution deduction of $600,000 for a sculpture that the IRS later valued at $100,000. Compute the applicable over- valuation penalty.